MCLEAN, VA-Freddie Mac is offering its fourth round of Structured Pass-Through certificates, or K Certificates, for the year. Pricing for the senior bonds--which total approximately $1 billion-- is happening this week, David Brickman, Freddie Mac vice president of multifamily CMBS Capital Markets, tells GlobeSt.com. The results will be enlightening, as this is the first large securitized deal in the multifamily since the events in Japan and Libya, he adds. Briefly, these global events created massive sell-offs, which secondary trading levels suggest are healed.

“This offering will be the first test to see if the markets are truly back,” Brickman says. “There are early indications that it is.” Strong demand also is indicative of the market’s support of this product, he says.
The K-011 Certificates are backed by 76 recently originated multifamily mortgages and are guaranteed by Freddie Mac. It is similar in structure to previous offerings. "We have settled into a structure that we think is the one that works and investors like," Brickman says.

Launched in 2009 with an eye to adding more liquidity to the multifamily sector, K Certificates are vehicles through which Freddie Mac is able to securitize multifamily loans. From the buy-side perspective, they provide investors with stable cash flows, structured credit enhancement and the Freddie Mac guarantee. This year, Freddie Mac decided to ramp up its issuance schedule to a monthly basis. 

By year’s end Freddie expects to have brought to market $15 billion through this program.Freddie Mac did six deals in 2010 for a total of $6 billion, after the first two in 2009. Total collateral in each deal is approximately $1.2 billion.